A noncooperative foundation of the competitive divisions for bads

Marco Mariotti and Quan Wen ()

Journal of Economic Theory, 2021, vol. 194, issue C

Abstract: Many economic situations involve the division of bads. We study a noncooperative game model for this type of division problem. The game resembles a standard multilateral bargaining model, but in our case, perpetual disagreement is not a feasible outcome. The driving feature of the model is that a player that makes an unacceptable proposal (causing breakdown with some probability) is made to internalize all the costs in case of breakdown. We show that as the probability of exogenous breakdown goes to zero, this game implements some competitive divisions in Markov perfect equilibria: the limit of any convergent sequence of equilibrium outcomes is a competitive division, but a competitive division may not be a limit of the equilibrium outcomes.

Keywords: Competitive division; Mixed manna; Markov perfect equilibrium (search for similar items in EconPapers)
JEL-codes: C71 C72 C73 C78 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0022053121000703
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:194:y:2021:i:c:s0022053121000703

DOI: 10.1016/j.jet.2021.105253

Access Statistics for this article

Journal of Economic Theory is currently edited by A. Lizzeri and K. Shell

More articles in Journal of Economic Theory from Elsevier
Bibliographic data for series maintained by Catherine Liu ().